M/S SAMRIDHI DEALERS PVT LTD., Mumbai V. DCIT CENTRAL CIRCLE 6(3), Mumbai

ITA 2209/MUM/2019

AI Insights

The case involves cross-appeals by the assessee, M/s Samridhi Dealers Pvt. Ltd., and the Revenue against the orders of the Commissioner of Income-tax (Appeals) concerning the assessment years 2011-12, 2012-13, and 2013-14. The primary issue was the addition of Rs.54,96,161 to the assessee's income, which was alleged to be on-money paid for a flat at the One Avighna Park project. The Tribunal examined the evidence, including statements and data from a seized pen drive, and found discrepancies in the application of the on-money rates used for different flats. The Tribunal's decision emphasized the need for a detailed examination of the actual payments made and directed a re-assessment for accurate determination.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123625 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: G
• Next Hearing Date: 20-02-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 08-04-2019
• Other Referred Cases: Nish Developers Pvt. Ltd. vs. M/s Samridhi Dealers Pvt. Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: CARRYING OUT PROPER INVESTIGATION OF
• Keywords: Unexplained investment; Opportunity of cross examination; Corroborative evidences; Third party statement; Retraction; Set aside
• Section: 131; 69; 133A; 72; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI PAVAN KUMAR GADALE (JUDICIAL MEMBER) ITA No. 2918/MUM/2019 Assessment Year: 2011-12 Dy. CIT, Central Circle-6(3), Room No. 1925, 19 th floor, Air India Building, Nariman Point, Mumbai-400021. Vs. M/s Samridhi Dealers Pvt. Ltd., 132, Utkalmoni Gopabandhu Sarani Burra Bazar, Kolkata, West Bengal-700 007. PAN No. AAJCS 1840 E Appellant Respondent ITA No. 2207/MUM/2019 Assessment Year: 2011-12 & ITA No. 2208/MUM/2019 Assessment Year: 2012-13 & ITA No. 2209/MUM/2019 Assessment Year: 2013-14 M/s Samridhi Dealers Pvt. Ltd., 43, Balkrishna Niwas, 1 st Floor, 47, 2 nd Pranjapole Lane, Gulal Wadi, Girgaon, Mumbai-400 004. Vs. Dy. CIT, Central Circle-6(3), Room No. 1925, 19 th floor, Air India Building, Nariman Point, Mumbai-400021. PAN No. AAJCS 1840 E Appellant Respondent Revenue by : Dr. Kishor Dhule, CIT-DR Assessee by : Mr. Vijay Mehta, AR Date of Hearing : 21/02/2023 Date of pronouncement : 23/03/2023 PER OM PRAKASH KANT, AM These cross-appeals of the assessee and the Revenue for assessment year 2011 28.02.2019 passed by the Ld. Commissioner of Income (Appeals)-40, Mumbai [in short ‘the Ld. CIT(A)’]. The appeals of the assessee for assessment year 2012 against two separate orders Ld. CIT(A)54, Mumbai. 2. A common issue therefore, these appeals have been heard together and disposed off by way this consolidated order for convenience and avoid repetition of facts. 2.1 Firstly, we take up the cross appeals for assessment year 2011-12. The ground under: On the facts and in the circumstances of the case and in law the Hon’ble CIT(A) erred in sustaining total addition of Rs.54,96,161/ pro rata basis according to the alleged cash payment made in the relevant asses party, without brining on record any corroborative evidence that appellant company has paid the impugned amount in cash over and above the agreement price in making investment in flat at One Avighna Park project of M ITA Nos. 2918, 2207 to 2209/M/2019 ORDER PER OM PRAKASH KANT, AM appeals of the assessee and the Revenue for assessment year 2011-12 are directed against order dated 28.02.2019 passed by the Ld. Commissioner of Income 40, Mumbai [in short ‘the Ld. CIT(A)’]. The appeals of the assessee for assessment year 2012-13 and 2013-14 are directed against two separate orders, both dated 20.02.2019 passed by the Ld. CIT(A)54, Mumbai. A common issue-in-dispute is involved in all these appeals and these appeals have been heard together and disposed off by way this consolidated order for convenience and avoid repetition we take up the cross appeals for assessment year 12. The grounds raised by the assessee are reproduced as On the facts and in the circumstances of the case and in law the Hon’ble CIT(A) erred in sustaining total addition of Rs.54,96,161/- to the returned income which she divided on pro rata basis according to the alleged cash payment made in the relevant assessment year merely on statement of third party, without brining on record any corroborative evidence that appellant company has paid the impugned amount in cash over and above the agreement price in making investment in flat at One Avighna Park project of M/s Nish Developers Pvt. Ltd. and M/s Samridhi Dealers Pvt. Ltd. ITA Nos. 2918, 2207 to 2209/M/2019 2 appeals of the assessee and the Revenue for 12 are directed against order dated 28.02.2019 passed by the Ld. Commissioner of Income-tax 40, Mumbai [in short ‘the Ld. CIT(A)’]. The appeals of the 14 are directed both dated 20.02.2019 passed by the ved in all these appeals and these appeals have been heard together and disposed off by way this consolidated order for convenience and avoid repetition we take up the cross appeals for assessment year s raised by the assessee are reproduced as On the facts and in the circumstances of the case and in law the Hon’ble CIT(A) erred in sustaining total addition of to the returned income which she divided on pro rata basis according to the alleged cash payment made in sment year merely on statement of third party, without brining on record any corroborative evidence that appellant company has paid the impugned amount in cash over and above the agreement price in making investment in flat at /s Nish Developers Pvt. Ltd. and the reasons assigned for doing so are wrong and contrary to the provision of Income Tax Rules made there under. 2.2 The ground raised by the Revenue are reproduced as under: 1. Whether on the facts and circumstances of the law, the id. money to the extent of Rs.54,96,161/ of Rs.4,15,00,000/ investment of the assessee within the meaning of Section 69 of the Income-tax Act, 1961.?. 2. Whether on the facts and circumstances of the case and in law, the id. the extent of Rs.4,000/ square feet in the form of on Nish Developers Private Limited, taking the basis of some other flats booked by some other parties during the same period, disregarding the fact that corroborative evidences of on paid by the assessee of Rs. 4,15,00,000/ under consideration, in the form of data from pendrive found and seized from Shri Pravin Mishra, a key employee of M/s Nish Dealers Pvt. Ltd., found during the course of search?. 3. "Whether on the facts and circumstances of the case and in law, the Ld. Shri Gulabchand Jain as evidence even though no evidence has been brought on record admittance of payment of Rs.1.14.00.000/ Gulabchand Corroborated the evidence found during the course of search in the case of M/s Nish 4. "Whether on the facts and circumstances of the case and in law, the Id. CIT(A) took cognizance of and relied upon the statement of Shri Gulabchan partly confirm the addition made by the AO and thereby dis regarding specific evidence directly related to the case in favour of general evidence?" 3. Briefly stated, facts of the case are that a search and the seizure action in the case of ITA Nos. 2918, 2207 to 2209/M/2019 the reasons assigned for doing so are wrong and contrary to the provision of Income Tax Rules made there under. The ground raised by the Revenue are reproduced as under: 1. Whether on the facts and circumstances of the CIT(A) has erred in restricting the addition of on money to the extent of Rs.54,96,161/- as against the addition of Rs.4,15,00,000/- made by the A.O. as unaccounted investment of the assessee within the meaning of Section 69 of tax Act, 1961.?. Whether on the facts and circumstances of the case and in CITIA) has erred in estimating the addition only to the extent of Rs.4,000/- per sq. ft. being the differential rate per square feet in the form of on-money paid by the assessee to Nish Developers Private Limited, taking the basis of some other flats booked by some other parties during the same period, disregarding the fact that corroborative evidences of on paid by the assessee of Rs. 4,15,00,000/- Crore for the year under consideration, in the form of data from pendrive found and seized from Shri Pravin Mishra, a key employee of M/s Nish Dealers Pvt. Ltd., found during the course of search?. 3. "Whether on the facts and circumstances of the case and in CIT(A) has erred in not accepting the statement of Shri Gulabchand Jain as evidence even though no evidence has been brought on record for cO-ercion particularly when the admittance of payment of Rs.1.14.00.000/- for the flat by Shri d Corroborated the evidence found during the course of search in the case of M/s Nish Developers (P) Ltd.?" 4. "Whether on the facts and circumstances of the case and in law, the Id. CIT(A) took cognizance of and relied upon the statement of Shri Gulabchand of having paid on money to partly confirm the addition made by the AO and thereby dis regarding specific evidence directly related to the case in favour of general evidence?" Briefly stated, facts of the case are that a search and the n the case of ‘Nish Developers (P.) Ltd. M/s Samridhi Dealers Pvt. Ltd. ITA Nos. 2918, 2207 to 2209/M/2019 3 the reasons assigned for doing so are wrong and contrary to the provision of Income Tax Rules made there under. The ground raised by the Revenue are reproduced as under: 1. Whether on the facts and circumstances of the case and in CIT(A) has erred in restricting the addition of on- as against the addition A.O. as unaccounted investment of the assessee within the meaning of Section 69 of Whether on the facts and circumstances of the case and in CITIA) has erred in estimating the addition only to per sq. ft. being the differential rate per paid by the assessee to Nish Developers Private Limited, taking the basis of some other flats booked by some other parties during the same period, disregarding the fact that corroborative evidences of on-money e for the year under consideration, in the form of data from pendrive found and seized from Shri Pravin Mishra, a key employee of M/s Nish Dealers Pvt. Ltd., found during the course of search?. 3. "Whether on the facts and circumstances of the case and in CIT(A) has erred in not accepting the statement of Shri Gulabchand Jain as evidence even though no evidence has ercion particularly when the for the flat by Shri d Corroborated the evidence found during the course Developers (P) Ltd.?" 4. "Whether on the facts and circumstances of the case and in law, the Id. CIT(A) took cognizance of and relied upon the d of having paid on money to partly confirm the addition made by the AO and thereby dis- regarding specific evidence directly related to the case in favour Briefly stated, facts of the case are that a search and the Nish Developers (P.) Ltd., Mumbai’ was carried out by the Investigation Wing of the Income on 04.04.2014. The assessee had booked a flat at ‘One Avighna’ a project developed by M/s Nish Developers Pvt. Ltd. Simultaneously a search action was Sanjay Jain i.e. Director of the assessee u/s 133A of the Income carried out at the premises of the assessee Dealers Pvt. Ltd.’ on 04.04.2014. The statement of Shri Sanjay Jain Director of the assessee that all financial matters ‘Gulabchand Jain’ who Pvt. Ltd. Statement of Shri Gulabchand Jain 131 of the Act wherein he admitted to have paid an amount of Rs.1.14 corres as on- flat purchased/booked M/s Nish Developers Pvt. from Shri Pravin Mishra, a key employee of M/s Ni Pvt. Ltd. The data in the pen received in respect of flats booked in ‘One A money in respect of flat booked by th of Rs.5.21 crores in respect of flat of the assessee the pendrive for three assessment years i.e. 2011 The relevant break up of as under: ITA Nos. 2918, 2207 to 2209/M/2019 carried out by the Investigation Wing of the Income- on 04.04.2014. The assessee had booked a flat at ‘One Avighna’ a project developed by M/s Nish Developers Pvt. Ltd. Simultaneously conducted at the residential premises of Shri Sanjay Jain i.e. Director of the assessee-company and survey u/s 133A of the Income-tax Act, 1961 (in short ‘the Act’) was carried out at the premises of the assessee-company on 04.04.2014. The statement of Shri Sanjay Jain assessee company was recorded wherein he stated that all financial matters were dealt with by his uncle, Shri who was also a Director of M/s Samr Pvt. Ltd. Statement of Shri Gulabchand Jain was also wherein he admitted to have paid an amount of -money to M/s Nish Developers Pvt. Ltd. for the /booked. During the course of search in the case of M/s Nish Developers Pvt. Ltd., a pen drive was found and seized from Shri Pravin Mishra, a key employee of M/s Ni in the pen drive cantained details of on received in respect of flats booked in ‘One Avighna’ including on money in respect of flat booked by the assessee. The total on in respect of flat of the assessee was reflected in the pendrive for three assessment years i.e. 2011- The relevant break up of said sum of Rs.5.21 crores M/s Samridhi Dealers Pvt. Ltd. ITA Nos. 2918, 2207 to 2209/M/2019 4 -tax Department on 04.04.2014. The assessee had booked a flat at ‘One Avighna’ a project developed by M/s Nish Developers Pvt. Ltd. Simultaneously the residential premises of Shri company and survey action tax Act, 1961 (in short ‘the Act’) was company ‘M/s Samridhi on 04.04.2014. The statement of Shri Sanjay Jain company was recorded wherein he stated dealt with by his uncle, Shri also a Director of M/s Samridhi Dealers also recorded u/s wherein he admitted to have paid an amount of money to M/s Nish Developers Pvt. Ltd. for the ch in the case of ve was found and seized from Shri Pravin Mishra, a key employee of M/s Nish Developers details of on-money vighna’ including on- e assessee. The total on-money was reflected in -12 to 2013-14. m of Rs.5.21 crores is reproduced AY 11-12 27.09.2010 AY 11-12 27.09.2010 AY 11-12 4.10.10 AY 11-12 7.10.10 AY 11-12 28.12.10 AY 11-12 31.12.10 AY 11-12 12.10.10 AY 11-12 19.10.10. AY 11-12 25.10.10 AY 11-12 02.11.10 AY 11-12 15.01.11 AY 11-12 01.02.11 AY 11-12 03.03.11 AY 12-13 06.09.11 AY 12-13 07.09.11 AY 12-13 29.12.11 AY 13-14 06.09.12 AY 13-14 10.09.12 3.1 In view of the material belonging to the assessee found d the course of the search of Act was issued on 19.10.2016. In response return of income on 27.10.2016 declaring total income of Rs.1016/ i.e. the same income which was declared by the assessee in the original return of income filed on 30.09 income filed, the assessee submitted that though a sum of Rs.1.14 crores was admitted during the course of recording of the statement before the DDIT Investigation included in the return o reason that the disclosure was taken by force hence Gulabchand Jain, director of the company ITA Nos. 2918, 2207 to 2209/M/2019 27.09.2010 Nemichand Jain 50.00 27.09.2010 Nemichand Jain 25.00 4.10.10 Nemichand Jain 35.00 7.10.10 Nemichand Jain 30.00 28.12.10 Nemichand Jain 25.00 31.12.10 Nemichand Jain 15.00 12.10.10 Nemichand Jain 35.00 19.10.10. Nemichand Jain 50.00 25.10.10 Nemichand Jain 35.00 02.11.10 Nemichand Jain 15.00 15.01.11 Nemichand Jain 25.00 01.02.11 Nemichand Jain 25.00 03.03.11 Nemichand Jain 25.00 Total (A) 415 06.09.11 Nemichand Jain 25.00 07.09.11 Nemichand Jain 25.00 29.12.11 Nemichand Jain 25.00 Total (B) 75.00 06.09.12 Nemichand Jain 20.00 10.09.12 Nemichand Jain 11.00 Total (C) 31.00 Total (A+B+C) 521 In view of the material belonging to the assessee found d the course of the search of third person,a notice u/s 153C of the Act was issued on 19.10.2016. In response, the assessee filed return of income on 27.10.2016 declaring total income of Rs.1016/ i.e. the same income which was declared by the assessee in the original return of income filed on 30.09.2011. In the return of the assessee submitted that though a sum of Rs.1.14 crores was admitted during the course of recording of the statement before the DDIT Investigation, Mumbai but the same was not included in the return of income filed u/s 153C of the A reason that the disclosure was taken by force hence Gulabchand Jain, director of the company filed a retraction letter. M/s Samridhi Dealers Pvt. Ltd. ITA Nos. 2918, 2207 to 2209/M/2019 5 50.00 25.00 35.00 30.00 25.00 15.00 35.00 50.00 35.00 15.00 25.00 25.00 25.00 415 25.00 25.00 25.00 75.00 20.00 11.00 31.00 521 In view of the material belonging to the assessee found during notice u/s 153C of the the assessee filed return of income on 27.10.2016 declaring total income of Rs.1016/- i.e. the same income which was declared by the assessee in the .2011. In the return of the assessee submitted that though a sum of Rs.1.14 crores was admitted during the course of recording of the statement but the same was not u/s 153C of the Act for the reason that the disclosure was taken by force hence, Sh. retraction letter. Shri Gulabchand Jain director of the company also appeared before the Assessing Officer. In response to the Act, he submitted that he had already retracted his statement given before the Investigation Wing. He further stated that no on money in cash had been given Nish Developers Pvt. Ltd. T wise payment of on-money recorded in the pendrive found from Shri Pravin Mishra and statement of Pravin Mishra that represented ‘on-money assessee, made addit crores paid relevant to the year under consideration. 4. On further appeal, the Ld. CIT(A) held that in assessee has paid on-money, however recorded in the pendrive of two instances of flat booked @ Rs.24,106/ per sq. ft. respectively and booked by the assessee @ Rs.20,927/ that on-money was paid a by the assessee and lakhs (=1725 x 4000) assessment years in the same ratio as on Assessing Officer. The rel reproduced as under: ITA Nos. 2918, 2207 to 2209/M/2019 Shri Gulabchand Jain director of the company also appeared before the Assessing Officer. In response to the summon issued u/s 131 of submitted that he had already retracted his statement Investigation Wing. He further stated that no on cash had been given for booking of flat in Nish Developers Pvt. Ltd. The Assessing Officer, in the view of date money recorded in the pendrive found from Shri Pravin Mishra and statement of Pravin Mishra that money’ received in respect of flats bo made addition for the unexplained investment of relevant to the year under consideration. On further appeal, the Ld. CIT(A) held that in assessee has however as far as the amount of recorded in the pendrive, he was not agreed. He however taken note of flat booked @ Rs.24,106/- and per sq. ft. respectively and compared those two rate with d by the assessee @ Rs.20,927/-. It was held by was paid at the rate of Rs.4000/- per SFT was by the assessee and accordingly he sustained the addition of Rs.69 (=1725 x 4000) which was to be apportioned in the three assessment years in the same ratio as on-money added by the Assessing Officer. The relevant finding of the Ld. CIT(A) is reproduced as under: M/s Samridhi Dealers Pvt. Ltd. ITA Nos. 2918, 2207 to 2209/M/2019 6 Shri Gulabchand Jain director of the company also appeared before the summon issued u/s 131 of submitted that he had already retracted his statement Investigation Wing. He further stated that no on- for booking of flat in project of M/s in the view of date money recorded in the pendrive found from Shri Pravin Mishra and statement of Pravin Mishra that said amount received in respect of flats booked by the unexplained investment of Rs.4.15 relevant to the year under consideration. On further appeal, the Ld. CIT(A) held that in assessee has amount of ‘on-money’ He however taken note and @ Rs.25,239/- those two rate with the flat t was held by the Ld. CIT(A) per SFT was paid he sustained the addition of Rs.69 which was to be apportioned in the three money added by the evant finding of the Ld. CIT(A) is “5.4 The submissions of the Ld. Counsel have been considered. It is the contention of the Id.Counsel that the addition has been made by the Ld.AO on the basis of a third party statement. The name mentioned in the data recorded by Shri Praveen Mishra is Shri Nemichand Jain. No statement of Shri Nemichand Jain has been taken nor did he make any admission at any point of time. Shri Gulabchand Jain has given a statement that cash of Rs.1.14 crores was had subsequently retracted this statement for the reason that he was pressurized and coerced into making such an admission. Inspite of the search premises, the investigation team could incriminating material or any evidence that on paid by the assessee. It is a fact that other than the statement of Shri Gulabchand Jain, there is no corroborative evidence which was found during the search. It is also the Id. contention that no cross has been provided to the assessee. The Ld.AO proposed to add Rs.5.21 Crores which was the on as per the pendrive. The assessee has purchased the flat with a carpet area of 1725 sq. ft. at a consideration of Rs.3,61,00,000/ Rs.3,58,00,000/ which is higher than the stamp value rate. If the amount of Rs.5.21 Crores is added to th it will make the total consideration paid Rs.8,82,00,000/ the per sq. ft. rate would be Rs.51,130/ high and not feasible. Therefore, it does not appear that the assessee has paid on 5.5 Though there are no corroborative evidences for payment of on-money detected during the search or during the assessment proceedings, there is an indicator that on been paid by the assessee. The appeal of M/s. Pvt. Ltd. was disposed off by the undersigned.During the course of appellate proceedings in that case, the undersigned had an occasion to call for the list of purchasers along with the date of booking and the rate at which the flats were bo was also held that a lot of purchasers have paid on the builder. It is noticed that around the same time as the assessee's booking of the flat, two flats were booked @ Rs.24,106/- the assessee has booked it @ Rs.20,927/ ITA Nos. 2918, 2207 to 2209/M/2019 The submissions of the Ld. Counsel have been considered. It is the contention of the Id.Counsel that the addition has been made by the Ld.AO on the basis of a third party statement. The mentioned in the data recorded by Shri Praveen Mishra is Shri Nemichand Jain. No statement of Shri Nemichand Jain has been taken nor did he make any admission at any point of Shri Gulabchand Jain has given a statement that cash of Rs.1.14 crores was paid to M/s. Nish Developers Pvt. Ltd. He had subsequently retracted this statement for the reason that he was pressurized and coerced into making such an Inspite of the search undertaken in the assessee's premises, the investigation team could not unearth any incriminating material or any evidence that on-money has been paid by the assessee. It is a fact that other than the statement of Shri Gulabchand Jain, there is no corroborative evidence which was found during the search. It is also the Id. contention that no cross-examination of Shri Praveen Mishra has been provided to the assessee. The Ld.AO proposed to add Rs.5.21 Crores which was the on-money paid by the assessee as per the pendrive. The assessee has purchased the flat with rpet area of 1725 sq. ft. at a consideration of Rs.3,61,00,000/-, The stamp duty value of this flat is Rs.3,58,00,000/-. The rate per sq. ft. works out to Rs.20,927/ which is higher than the stamp value rate. If the amount of Rs.5.21 Crores is added to the consideration of Rs.3.61 Crores, it will make the total consideration paid Rs.8,82,00,000/ the per sq. ft. rate would be Rs.51,130/- which is abnormally high and not feasible. Therefore, it does not appear that the assessee has paid on-money of Rs.5.21 Crores for this flat. .5 Though there are no corroborative evidences for payment of money detected during the search or during the assessment proceedings, there is an indicator that on-money would have been paid by the assessee. The appeal of M/s. Nish Developers Pvt. Ltd. was disposed off by the undersigned.During the course of appellate proceedings in that case, the undersigned had an occasion to call for the list of purchasers along with the date of booking and the rate at which the flats were bo was also held that a lot of purchasers have paid on the builder. It is noticed that around the same time as the assessee's booking of the flat, two flats were booked @ and Rs.25,239/- per sq. ft., respectively whereas ssee has booked it @ Rs.20,927/-. It appears that the M/s Samridhi Dealers Pvt. Ltd. ITA Nos. 2918, 2207 to 2209/M/2019 7 The submissions of the Ld. Counsel have been considered. It is the contention of the Id.Counsel that the addition has been made by the Ld.AO on the basis of a third party statement. The mentioned in the data recorded by Shri Praveen Mishra is Shri Nemichand Jain. No statement of Shri Nemichand Jain has been taken nor did he make any admission at any point of Shri Gulabchand Jain has given a statement that cash of paid to M/s. Nish Developers Pvt. Ltd. He had subsequently retracted this statement for the reason that he was pressurized and coerced into making such an undertaken in the assessee's not unearth any money has been paid by the assessee. It is a fact that other than the statement of Shri Gulabchand Jain, there is no corroborative evidence which was found during the search. It is also the Id.Counsel's examination of Shri Praveen Mishra has been provided to the assessee. The Ld.AO proposed to add money paid by the assessee as per the pendrive. The assessee has purchased the flat with rpet area of 1725 sq. ft. at a consideration of duty value of this flat is . The rate per sq. ft. works out to Rs.20,927/- which is higher than the stamp value rate. If the amount of e consideration of Rs.3.61 Crores, it will make the total consideration paid Rs.8,82,00,000/- and which is abnormally high and not feasible. Therefore, it does not appear that the .21 Crores for this flat. .5 Though there are no corroborative evidences for payment of money detected during the search or during the assessment money would have Nish Developers Pvt. Ltd. was disposed off by the undersigned.During the course of appellate proceedings in that case, the undersigned had an occasion to call for the list of purchasers along with the date of booking and the rate at which the flats were booked. It was also held that a lot of purchasers have paid on-money to the builder. It is noticed that around the same time as the assessee's booking of the flat, two flats were booked @ per sq. ft., respectively whereas . It appears that the assessee had also paid on that he made an admission of Rs. 1.14 crores. No other reason can explain the difference in booking rate by the assessee. Therefore, it is p certain amount of on booking rates of similar flats around the same time. The differential rate of a round figure of Rs.4,000/ per sq. ft. is estimated as the on The flat purchased by the assessee has a carpet area of 1,725 sq. ft. and the same was purchased at a cost of Rs.3,61,00,000/ If the differential rate of Rs.4,000/ work out to Rs.69,00,000/ assessee has paid on purchase of this flat and the same amount will have to be apportioned in the three years in the same ratio as the on money added by the Ld.AO. The accordingly works out to Rs.54,96,161/ to restrict the disallowance to Rs.54,96,161/ gets relief for the balance amount. This ground of appeal is Partly Allowed. 5. Before us, the Ld. Counsel of the assessee assailed the order of the Ld. CIT(A). Firstly addition merely on the basis of estimation of the rates of the two flats. Secondly, addition was made by the Assessing Officer on the statement of third party also retracted. Thirdly amount recorded in the pendrive are different and the assessee has also retracted his statement Shri Pravin Mishra i.e. a key person on whose statement addition has been made was specifically asked. ITA Nos. 2918, 2207 to 2209/M/2019 assessee had also paid on-money and it is for the same reason that he made an admission of Rs. 1.14 crores. No other reason can explain the difference in booking rate by the assessee. Therefore, it is presumed that the assessee had also paid certain amount of on-money which is estimated based on the booking rates of similar flats around the same time. The differential rate of a round figure of Rs.4,000/- (25000 per sq. ft. is estimated as the on-money paid by the assessee. The flat purchased by the assessee has a carpet area of 1,725 sq. ft. and the same was purchased at a cost of Rs.3,61,00,000/-, this gives the rate per sq. ft. as Rs.20,927/ If the differential rate of Rs.4,000/- is taken, the work out to Rs.69,00,000/- (1,725 X 4,000/-). It is held that the assessee has paid on-money of Rs.69,00,000/ purchase of this flat and the same amount will have to be apportioned in the three years in the same ratio as the on ed by the Ld.AO. The addition for this year accordingly works out to Rs.54,96,161/-. The Ld.AO is directed to restrict the disallowance to Rs.54,96,161/- and the appellant gets relief for the balance amount. This ground of appeal is Partly Allowed.” ore us, the Ld. Counsel of the assessee assailed the order of Firstly that the Ld. CIT(A) has sustained the addition merely on the basis of estimation of the rates of the two , addition was made by the Assessing Officer the statement of third party i.e. Sh. Pravin Mishra hirdly the disclosure made by the assessee and amount recorded in the pendrive are different and the assessee has also retracted his statement. Fourthly, no cross- Shri Pravin Mishra i.e. a key person on whose statement addition has been made was, provided to the assessee despite being M/s Samridhi Dealers Pvt. Ltd. ITA Nos. 2918, 2207 to 2209/M/2019 8 money and it is for the same reason that he made an admission of Rs. 1.14 crores. No other reason can explain the difference in booking rate by the assessee. resumed that the assessee had also paid money which is estimated based on the booking rates of similar flats around the same time. The (25000-20927) oney paid by the assessee. The flat purchased by the assessee has a carpet area of 1,725 sq. ft. and the same was purchased at a cost of , this gives the rate per sq. ft. as Rs.20,927/-, is taken, the same would ). It is held that the money of Rs.69,00,000/- for the purchase of this flat and the same amount will have to be apportioned in the three years in the same ratio as the on- addition for this year . The Ld.AO is directed and the appellant gets relief for the balance amount. This ground of appeal is ore us, the Ld. Counsel of the assessee assailed the order of that the Ld. CIT(A) has sustained the addition merely on the basis of estimation of the rates of the two , addition was made by the Assessing Officer relying i.e. Sh. Pravin Mishra which was the disclosure made by the assessee and amount recorded in the pendrive are different and the assessee has -examination of Shri Pravin Mishra i.e. a key person on whose statement addition provided to the assessee despite being 5.1 Further, he support money should be made in the case of the decision of the Tribunal in the case of ITA No. 3534/M/2019 and CO No. 61/M/2020 for assessment year 2014-15 and in the case of 5640/M/2017 for assessment year 2013 also referred to the decision in the case of Ltd. in ITA No. 3490, 3523, 2514, 3524 & 3525/M/2018 and 3131, 3129, 3130, 2440, 3102 & 3127/M/2018 submitted that rate fixed for calculation of the said case might not be followed in the case of the assessee. 6. On the other hand, the Ld. Departmental Representative (DR) submitted that the inform corroborated by the statement of the three buyers which was recorded during the course of search proceedings that such a fact is recorded on page 47 of the order of the Tribunal in the case of Nish Developers Pvt. Ltd. submitted that the pendrive is date the assessee has been recorded. He further submitted that the Ld. CIT(A) has confused himself the flats of the building. He submitted that there could not be any uniform rate for all the flats and rate of the flats floor. He submitted that the Ld. CIT(A) himself has directed to take the statement of on- ITA Nos. 2918, 2207 to 2209/M/2019 Further, he supported the contention that no addition for on money should be made in the case of the assessee. He decision of the Tribunal in the case of M/s Sanjay V. Parmar in ITA No. 3534/M/2019 and CO No. 61/M/2020 for assessment and in the case of Jayesh Kewalchan in ITA No. 5640/M/2017 for assessment year 2013-14. The Ld. Counsel also referred to the decision in the case of Nish Developers Pvt. Ltd. in ITA No. 3490, 3523, 2514, 3524 & 3525/M/2018 and 3131, 3129, 3130, 2440, 3102 & 3127/M/2018 submitted that rate fixed for calculation of the ‘on said case might not be followed in the case of the assessee. On the other hand, the Ld. Departmental Representative (DR) submitted that the information contended in the pendrive by the statement of the three buyers which was during the course of search proceedings recorded on page 47 of the order of the Tribunal in the case of Nish Developers Pvt. Ltd. (supra). submitted that the pendrive is date-wise payment of cash paid by ssessee has been recorded. He further submitted that the Ld. CIT(A) has confused himself regarding application of the sale rate of of the building. He submitted that there could not be any uniform rate for all the flats and rate of the flats diff floor. He submitted that the Ld. CIT(A) himself has directed to take -money on said pendrive for apportionment M/s Samridhi Dealers Pvt. Ltd. ITA Nos. 2918, 2207 to 2209/M/2019 9 the contention that no addition for on- He relied on the M/s Sanjay V. Parmar in ITA No. 3534/M/2019 and CO No. 61/M/2020 for assessment Jayesh Kewalchan in ITA No. . The Ld. Counsel Nish Developers Pvt. Ltd. in ITA No. 3490, 3523, 2514, 3524 & 3525/M/2018 and 3131, 3129, 3130, 2440, 3102 & 3127/M/2018 but he on-money’ in the said case might not be followed in the case of the assessee. On the other hand, the Ld. Departmental Representative (DR) ation contended in the pendrive was by the statement of the three buyers which was during the course of search proceedings, he submitted recorded on page 47 of the order of the Tribunal (supra). Further, he wise payment of cash paid by ssessee has been recorded. He further submitted that the Ld. application of the sale rate of of the building. He submitted that there could not be any differs on basis of floor. He submitted that the Ld. CIT(A) himself has directed to take said pendrive for apportionment of addition sustained by him on one side he is taking the information assessee for apportionment of the addition sustained but for the purpose of sustaining addition he is adopting only sales rate recorded in respect of not justified in selectively takin on-money payment. 7. We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. We find that in the case issue-in- assessed in respect of flat booked by the assessee Director of the assessee company himself admitted payment of on money Rs.1.14 crores during the statement recorded u/s 131 of the Act however later on he retracted and said on offered in the return of income 7.1 Further, the information of the on the assessee recorded in the pendrive found from key person of the ‘Nish Develpers Pvt. Ltd. i.e. Shri Pravin Mishra money payment of Rs.5.21 crores relevant to three assessment years from assessment year 2011 relevant to the assessment years is of Rs.4.15 crores. The Assessing Officer accordingly made the said addition year under consideration ITA Nos. 2918, 2207 to 2209/M/2019 addition sustained by him in the three years. So according to him on one side he is taking the information of on-money paid by the assessee for apportionment of the addition sustained but for the purpose of sustaining addition he is adopting only sales rate in respect of two flats. According to him, the Ld. CIT(A) is not justified in selectively taking rate of two flats for computing the We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. We find that -dispute is in respect of amount of on in respect of flat booked by the assessee Director of the assessee company himself admitted payment of on money Rs.1.14 crores during the statement recorded u/s 131 of the Act however later on he retracted and said on-money was not ed in the return of income by the assessee. Further, the information of the on-money payment made by the assessee recorded in the pendrive found from key person of the Nish Develpers Pvt. Ltd. i.e. Shri Pravin Mishra, reflects money payment of Rs.5.21 crores relevant to three assessment years from assessment year 2011-12 to 2013-14. The said amount relevant to the assessment years is of Rs.4.15 crores. The Assessing Officer accordingly made the said addition of Rs.4.15 year under consideration. The Ld. CIT(A) has following the two M/s Samridhi Dealers Pvt. Ltd. ITA Nos. 2918, 2207 to 2209/M/2019 10 . So according to him, money paid by the assessee for apportionment of the addition sustained but for the purpose of sustaining addition he is adopting only sales rate two flats. According to him, the Ld. CIT(A) is g rate of two flats for computing the We have heard rival submission of the parties on the issue-in- dispute and perused the relevant material on record. We find that dispute is in respect of amount of on-money in respect of flat booked by the assessee-company. The Director of the assessee company himself admitted payment of on- money Rs.1.14 crores during the statement recorded u/s 131 of the money was not money payment made by the assessee recorded in the pendrive found from key person of the reflects total on- money payment of Rs.5.21 crores relevant to three assessment 14. The said amount relevant to the assessment years is of Rs.4.15 crores. The Assessing of Rs.4.15 crores in the . The Ld. CIT(A) has following the two instances of sale of the fla the addition of the amount of Rs.68 lakhs for three assessment years. According to the Ld. CIT(A) those two around same time when the assessee booked flat. took differential rate of around Rs.4,000/ with carpet area of disallowance to Rs.69 lakhs. 7.2 Before us, the Ld. Counsel of the assessee submitted that cross-examination was provided to the Mishra, but in our opinion addition has not been made merely on the basis of his statement and it is on the basis of the entries recorded in the pendrive data maintained by Shri Pravin Mishra on behalf of the company out of place that director of the payment of on-money of Rs.1.44 crores though same was retracted later on. In the case of Sanjay V. Parmar (supra) Ld. Counsel of the assessee, was booked in the name of the said assessee in the building ‘One Avighna’ of M/s Nish Developers Pvt. Ltd. and therefore ad was deleted but facts of the instant case are different assessee has booked the flat in its name. We find that in the case of M/s Nish Developers Pvt. Ltd. the objections against considering the rates pr pendrive directed to apply rate of Rs.22,214/ ITA Nos. 2918, 2207 to 2209/M/2019 of sale of the flats as reflected in the pendrive sustained the amount of Rs.68 lakhs for three assessment years. According to the Ld. CIT(A) those two flats were booked around same time when the assessee booked flat. differential rate of around Rs.4,000/- and after of 1750 sq. ft. of assessee’s flat disallowance to Rs.69 lakhs. the Ld. Counsel of the assessee submitted that examination was provided to the assessee of Shri Pravin ut in our opinion addition has not been made merely on the basis of his statement and it is on the basis of the entries e pendrive data maintained by Shri Pravin Mishra on company M/s Nish Developers Pvt. Ltd. director of the assessee company himself admitted money of Rs.1.44 crores though same was retracted on. In the case of Sanjay V. Parmar (supra), relied upon by Ld. Counsel of the assessee, the Tribunal has recorded that no flat was booked in the name of the said assessee in the building ‘One Avighna’ of M/s Nish Developers Pvt. Ltd. and therefore ad was deleted but facts of the instant case are different assessee has booked the flat in its name. We find that in the case of M/s Nish Developers Pvt. Ltd. (supra) the Tribunal after considering the objections against considering the rates pr pendrive directed to apply rate of Rs.22,214/- for the flat sold and M/s Samridhi Dealers Pvt. Ltd. ITA Nos. 2918, 2207 to 2209/M/2019 11 ts as reflected in the pendrive sustained the amount of Rs.68 lakhs for three assessment flats were booked around same time when the assessee booked flat. Therefore, he and after multiplying of assessee’s flat, he estimated the Ld. Counsel of the assessee submitted that no assessee of Shri Pravin ut in our opinion addition has not been made merely on the basis of his statement and it is on the basis of the entries e pendrive data maintained by Shri Pravin Mishra on M/s Nish Developers Pvt. Ltd. It is also not company himself admitted money of Rs.1.44 crores though same was retracted relied upon by the he Tribunal has recorded that no flat was booked in the name of the said assessee in the building ‘One Avighna’ of M/s Nish Developers Pvt. Ltd. and therefore addition was deleted but facts of the instant case are different as the assessee has booked the flat in its name. We find that in the case of the Tribunal after considering the objections against considering the rates provided in the the flat sold and any flat sold lower than this rate considered as on-money received on finding of the Tribunal in para 28 in th Pvt. Ltd. (supra) is reproduced as under: “28. In the present case also during cross examination before AO during assessment proceeding, Mr Pravin Mishra admitted that he has prepared all this data on his own imagination which is not related to the assessee. The cross examination being conducted in the presence of the AO, the AO has also not reexamined Mr Pravin Mishra, thus acceding to the same. In case the AO was not convinced of the said statement, he ought to have re-examined o gather further evidences for substantiating his stand. Therefore, considering the facts of the case and judicial pronouncements in this regard, the order of CIT(A) on the issue of pen drive cannot be accepted. Conside the assessee, we are of the view that the order of Ld. CIT(A) applying a blanket rate of 20% on the on the basis of data in the pen drive wherein the name of the customers were not even matching with the data in drive and also the fact the amounts mentioned against the various flats purchasers having glaring and huge variations and that the pen drive was recovered from the premises of the employee of the assessee, the onus is on the Revenue to prove that data in pen drive are related to affairs of the assessee. Though the AO has not done his duty to determine correct income of the assessee by carrying out proper investigation of the case, yet the Tribunal being highest fact finding body is equally duty boun based on the facts available on record. Considering the statement of third parties and sales pattern of the assessee as submitted before us by the assessee as also before the authorities below, we observe that the assessee's project is varying from Rs.30,000 per sq. ft. during this period. suggest that there may be some involvement of on these transactions. This fact was also in their statement recorded U/s course of search. Therefore to meet ends of justice, it would be ITA Nos. 2918, 2207 to 2209/M/2019 lower than this rate, the difference was directed to be money received on the said flat. The relevant finding of the Tribunal in para 28 in the case of Nish Developers is reproduced as under: 28. In the present case also during cross examination before AO during assessment proceeding, Mr Pravin Mishra admitted that he has prepared all this data on his own imagination not related to the assessee. The cross examination being conducted in the presence of the AO, the AO has also not reexamined Mr Pravin Mishra, thus acceding to the same. In case the AO was not convinced of the said statement, he ought examined or carried out further investigation to gather further evidences for substantiating his stand. Therefore, considering the facts of the case and judicial pronouncements in this regard, the order of CIT(A) on the issue of pen drive cannot be accepted. Considering all these facts of the assessee, we are of the view that the order of Ld. CIT(A) applying a blanket rate of 20% on the on-money calculated on the basis of data in the pen drive wherein the name of the customers were not even matching with the data in drive and also the fact the amounts mentioned against the various flats purchasers having glaring and huge variations and that the pen drive was recovered from the premises of the employee of the assessee, the onus is on the Revenue to prove ata in pen drive are related to affairs of the assessee. Though the AO has not done his duty to determine correct income of the assessee by carrying out proper investigation of the case, yet the Tribunal being highest fact finding body is equally duty bound to determine correct income of the assessee based on the facts available on record. Considering the statement of third parties and sales pattern of the assessee as submitted before us by the assessee as also before the authorities below, we observe that the selling rate of the flats in the assessee's project is varying from Rs.20,000 per sq Ft to Rs.30,000 per sq. ft. during this period. Such variation pattern suggest that there may be some involvement of on these transactions. This fact was also admitted by five buyers in their statement recorded U/s '132(4) of the Act during the course of search. Therefore to meet ends of justice, it would be M/s Samridhi Dealers Pvt. Ltd. ITA Nos. 2918, 2207 to 2209/M/2019 12 the difference was directed to be the said flat. The relevant Nish Developers 28. In the present case also during cross examination before AO during assessment proceeding, Mr Pravin Mishra admitted that he has prepared all this data on his own imagination not related to the assessee. The cross examination being conducted in the presence of the AO, the AO has also not reexamined Mr Pravin Mishra, thus acceding to the same. In case the AO was not convinced of the said statement, he ought r carried out further investigation to gather further evidences for substantiating his stand. Therefore, considering the facts of the case and judicial pronouncements in this regard, the order of CIT(A) on the issue ring all these facts of the assessee, we are of the view that the order of Ld. CIT(A) money calculated on the basis of data in the pen drive wherein the name of the customers were not even matching with the data in the pen drive and also the fact the amounts mentioned against the various flats purchasers having glaring and huge variations and that the pen drive was recovered from the premises of the employee of the assessee, the onus is on the Revenue to prove ata in pen drive are related to affairs of the assessee. Though the AO has not done his duty to determine correct income of the assessee by carrying out proper investigation of the case, yet the Tribunal being highest fact finding body is d to determine correct income of the assessee based on the facts available on record. Considering the statement of third parties and sales pattern of the assessee as submitted before us by the assessee as also before the the selling rate of the flats in Rs.20,000 per sq Ft to Such variation pattern suggest that there may be some involvement of on-money in admitted by five buyers '132(4) of the Act during the course of search. Therefore to meet ends of justice, it would be reasonable to determine on of sale for each year with the transaction to money for the period upto the date of search for all 71 flats sold during this period, as out of 72 flats one of the flat was cancelled. In other words as per data available on records, average rate for A Y 2011 flats sold during this year lower than this rate. the difference should be considered as on of the said flat. In our considered this aspect needs to examined at the level of AO to ascertain the amount of on money. Accordingly, we set aside the order of Id CIT(A) on this issue and direct the AO to examine working of average 'sale rate on the basis of sales data on yearly basis and determine on-money for A Y 2011 Needless to mention th of hearing to the assessee. 7.3 Since, the Tribunal Ltd. has directed to adopt the rate of R reasonable market rate and Developers Pvt. Ltd. as the on Thus the amount of on Ltd. i.e. company becomes the amount of on customers for booking which the assessee has booked than Rs.22,214/- per sq. ft. therefore, difference amount i.e. Rs. paid by the assessee. Accordingly, sustained in the case of the assessee. The respective ground of Revenue and the assessee are accordingly partly allowed. This amount of addition sustained is accordingly apportioned in three assessment years in the ratio of the payment ITA Nos. 2918, 2207 to 2209/M/2019 reasonable to determine on-money by comparing average rate of sale for each year with the transaction to determine on money for the period upto the date of search for all 71 flats sold during this period, as out of 72 flats one of the flat was cancelled. In other words as per data available on records, average rate for A Y 2011-12 works out to Rs.22,214/> so flats sold during this year lower than this rate. the difference should be considered as on-money received on account of sale of the said flat. In our considered this aspect needs to examined at the level of AO to ascertain the amount of on ordingly, we set aside the order of Id CIT(A) on this issue and direct the AO to examine working of average 'sale rate on the basis of sales data on yearly basis and determine money for A Y 2011-12 to A Y 2014-15 on the same lines Needless to mention that the AO will give sufficient opportunity of hearing to the assessee.” Since, the Tribunal (supra) in the case of Nish Developers Pvt. irected to adopt the rate of Rs.22,214/- per sq. ft. reasonable market rate and difference amount recorded by Nish as the on-money received by the said company. Thus the amount of on-money received by the Nish Developers P. company becomes the amount of on-money paid by the booking of those flats. In the instant case, the rate which the assessee has booked i.e. Rs.20,927/-, is per sq. ft. fixed by the Tribunal (supra) therefore, difference amount i.e. Rs.2927/- is held to be on paid by the assessee. Accordingly, 2927 x 1750 = 51,22,250/ sustained in the case of the assessee. The respective ground of Revenue and the assessee are accordingly partly allowed. This amount of addition sustained is accordingly directed to be apportioned in three assessment years in the ratio of the payment M/s Samridhi Dealers Pvt. Ltd. ITA Nos. 2918, 2207 to 2209/M/2019 13 money by comparing average rate determine on- money for the period upto the date of search for all 71 flats sold during this period, as out of 72 flats one of the flat was cancelled. In other words as per data available on records, 12 works out to Rs.22,214/> so any flats sold during this year lower than this rate. the difference money received on account of sale of the said flat. In our considered this aspect needs to examined at the level of AO to ascertain the amount of on- ordingly, we set aside the order of Id CIT(A) on this issue and direct the AO to examine working of average 'sale rate on the basis of sales data on yearly basis and determine 15 on the same lines at the AO will give sufficient opportunity Nish Developers Pvt. per sq. ft. as the ecorded by Nish money received by the said company. Nish Developers P. money paid by the ant case, the rate s found to lower fixed by the Tribunal (supra) and is held to be on-money 1750 = 51,22,250/- is sustained in the case of the assessee. The respective ground of Revenue and the assessee are accordingly partly allowed. This directed to be apportioned in three assessment years in the ratio of the payment made by the assessee for booking of the flat. Therefore, for allocation of addition in all three assessment years matter is restored to the file of the Ld. Assessing Officer for verification then decide the amount of addition accordingly. Since, the ground in appeal of the assessee for assessment year 2012 are identical with ground raised in assessment year 2011 therefore following our finding above year 2012-13 and 2013 purposes. 8. In the result, the appeal the assesee are partly allowed for statistical purposes. Order pronounced under Rule 34(4) of the 1963 on 23/03/2023. Sd/- (PAVAN KUMAR GADALE JUDICIAL MEMBER Mumbai; Dated: 23/03/2023 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. ITA Nos. 2918, 2207 to 2209/M/2019 made by the assessee for booking of the flat. Therefore, for allocation of addition in all three assessment years matter is restored to the file of the Ld. Assessing Officer for verification then decide the amount of addition accordingly. Since, the ground in appeal of the assessee for assessment year 2012-13 and 2013 ground raised in assessment year 2011 therefore following our finding above, the appeals in a 13 and 2013-14 are also allowed partly for statistical In the result, the appeals of the Revenue as well as appeals of the assesee are partly allowed for statistical purposes. Order pronounced under Rule 34(4) of the /2023. Sd/- PAVAN KUMAR GADALE) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, M/s Samridhi Dealers Pvt. Ltd. ITA Nos. 2918, 2207 to 2209/M/2019 14 made by the assessee for booking of the flat. Therefore, for allocation of addition in all three assessment years matter is restored to the file of the Ld. Assessing Officer for verification and then decide the amount of addition accordingly. Since, the ground 13 and 2013-14 ground raised in assessment year 2011-12 and the appeals in assessment 14 are also allowed partly for statistical of the Revenue as well as appeals of the assesee are partly allowed for statistical purposes. Order pronounced under Rule 34(4) of the ITAT Rules, - OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, //True Copy// ITA Nos. 2918, 2207 to 2209/M/2019 (Assistant Registrar) ITAT, Mumbai M/s Samridhi Dealers Pvt. Ltd. ITA Nos. 2918, 2207 to 2209/M/2019 15 (Assistant Registrar) ITAT, Mumbai